man, i would be an entrepreneur, in a private company, be totally in control of my destiny. >> thank you very much for joining us. right now, it's time for "squawk on the street." good thursday morning and happy fed day. welcome to "squawk on the street." i'm carl with melissa lee, jim cramer, david faber. markets are awaiting the fed's decision on interest rates this afternoon and in the meantime, chewing on wholesale prices jumped the most in three years. 17 in august. gas prices largely to blame. europe, some losses there centered mostly in spain although italian bond yields coming down sharply. road map is morning begins at the fed. will bernanke give the markets qe3 and how long rates will remain low at the feds press

conference today. >> some say it's a significant redesign. others say it's a sleeper. whatever you think of the iphone 5, it's keeping apple shares moving higher. >> number of big downgrades this morning. citi cutting ratings on intel. amd says pcs are losing the battle against tablets and smart phones. >> and a very special guest. the ceo of j. crew. of course, we start this morning with the fed. markets looking to open higher ahead of the fed's late es monetary policy meeting. the fed will announce a decision at 12:15 p.m. eastern time. and this is large lly a wait an see as markets are largely anticipating the fed to hand it what it wants and that would be more stimulus. >> we've had a lot of news items in the last few weeks that were

delivered that were better than expected or expected as someone who follows stocks, i can tell you this is i think not make or break. i was just listening to super cell in "squawk box." great interview this morning, but i come back and say listen, it's a big, bad event. people aren't going to be happy. he hasn't done enough. that's my theme. you get that from people. what did the fed do? not enough. then it's business as usual. >> but there is that question of what more can they do. even whatever it is they do, is it even possible -- is it really going to impact the way ceos are thinking. the way anybody's thinking. >> it's going to impact the way individuals think in terms of being able to get income. you're not going to get income from cds. >> so, nothing's going to change there. >> maybe you have to go and buy proctor and gamble. >> or maybe you have. you're trying to adjust to this

new, no interest rate world. >> but the money's still coming out of the markets. we've seen those weekly numbers. maybe people say i'm tired of making 1%. i'd rather own johnson & johnson. >> philip morris, little dividend action today. people talk about the september swoon that has not happened so far. dow's up 2% for the month. draghi appears to be working his magic show. if seasonal adjustments on jobs continue to happen, maybe be bernanke lets this play out. >> 90% of the active money manager ts are behind the money market. it's easier to catch up by doing nothing. >> and we've talked about all these things and it has been quite a rally we've seen, but i wonder when it's going to come to an end because eventually, it will. >> transports keep moving and we see kind of earnings like we saw from pier one today. retail's been very strong.

kind of odd given the inflation numbers today. >> i was going to say, ppi up 17. we know what gas prices have done. oil is almost to 98 and there are some critics who say the inflationary policy is increasing. >> we're talking to j. crew today. i was looking at the numbers, even though the company's private, they issue numbers. double digit same-store sales. >> 21% sales growth overall. >> i know he's got reasonable priced stuff, but i'm saying i continue to see these retailers do so much better than expected. it was supposed to be a not great back to school season. turned out to be on fire. these are the things that shouldn't be happening. how do we explain that? but it's happening. impeerically, the consumer seemed to be wealthier. >> goldman sachs had a very

interesting note out identifying the 30 stocks outperforming, that would include qe, extensions of twist sh et cetera, so the two weeks prior and the six weeks after, there are 30 that outperform the markets. among them, disk, 23%. sniter steel. lpx, 7% outperformance and dick's sporting goods, up 11%. there are possibly some opportunities here when you go specifics. >> two downgrades at louisiana-pacific last two weeks. dixon's very interesting. good play. downgrade of nike today. so there's a lot of downgrades except for sandisk. look in the end, what's it going to come down to? apple. two markets in this country. everything and then apple.

i'm a believer in apple. >> speaking of which, reviews for the iphone 5 unveiled yesterday are pouring in. the phone is taller allowing for a fifth row of icons. also, the thinnest hand set on the market, but the change causing most of the buzz is the smaller dock connecter, which means it will not be compatible. journal has a great piece today about a guy who owns a hotel, 600 apple docks in the room and the prospect of changing those is my god. >> a clock collection. 200 wind up clocks, worst day in the world, daylight saving time. >> cost that guy 18 grand. 30 bucks for the adapter. >> good news for radio shack. >> there's nothing that's good news for the shackster. $2, man. i've got my -- my cold, you have to pry this out of my cold dead hands. i'm never going to lose my

iphone expeptide i'm getting the iphone 5. why? i've unplugged this two hours ago. if something can make it so i don't hit 40% battery life by the time "mad money's" on, i'm a buyer. >> i operate half the time in the red zone. >> red zone is probably the most frightening place to be. because when you're down to that and everyone who has one of these knows, t like, please, please. >> it's like you're staring down the barrel. what do you do without the thing? your e-mail. lte is a battery drain, so we'll see if the new battery will actually extend the life. >> 4g. >> i leave my home without any devices. >> that's frightening. >> it's a blackberry. >> 1998. >> listen to me.

on my new phone, will be watching the games. do you watch games on your blackberry? >> pong is a game. there's the brick thing. brick breaker. >> oh, the brick thing. >> i have teenagers. beer pong. i've been trying to stamp that out for ages. this is the talk of today because people reading the "usa today," i happen to love their guy. this is their, a guy, he is talking about thinner, faster, lighter. the quote of the day is frankly that he thinks that this thing is well, he's saying this is maybe the true answer that my must wait until i've had a chance to put the iphone 5 through its paces, but the new phone looks awfully inviting is the quote of the day. >> cause some say it's more incremental. samsung. the differences between the iphone and competitors these days are getting smaller and smaller.

>> the difference is this dope of a woman in siri, she can do it and that's big and she can also book reservations. it's gotten so smart. this woman is now in the game. >> dramatically faster, clearer and looks different. isn't that going to be enough to get people to buy a lot of them? >> yes. but the key for the stock, why it's still moving higher after the launch, is that the rollout is going to be much faster around the world and that's going to allow for more units to be sold in the september quarter. >> 100 countries by december. 200 in 40 carriers. it is a biggest rollout from apple ever. >> that's why these derivative plays, the sir yous logic, the camera. you look better than you did in the movie last night. i'm tweeting you. >> the camera can't handle the handsome. >> it's true. i got to get the iphone 5 today. >> cannot compete.

>> i'm tweeting you right now. it takes pictures and i'm tweeting that picture because you look really handsome. >> isi today saying the stock is extended well above the 200 day. lot of talk about trapped longs in apple. they're in it. they're long. it's been great and they're afraid to get out. >> trapped longs at ek knox are doing pretty good. don't trade the stock. did you see yesterday the dopes trading it? it was down two, up one. they're trading on everything like brian sullivan is saying, we don't know the cost, so we send it down, too. brian was doing remarkable work. jon fortt and brian. people who are trading on the leak of what fortt is saying to brian, you're dumb as wood. no insult. >> by the way, the pricing on the iphone 5 and then the lower price on the ipad, that would indicate the ipad mini would be squeezed into the zone of about

$100 in pricing. if the ipad price is dropping and the iphone price is rising, you're right in that little tiny zone for the ipad mini. >> in terms of verizon, at&t, does verizon benefit more because lte is what it's most associate associated with? >> i saw the the reaction. in yesterday's session. >> david, you've been the one that talks about how much verizon's going to have to pay versus the droid. >> of course, the carrier subsidies are enormous. no doubt about it. >> the cfo gave an interview and said for the iphones they sell, it will be a $449 subsidy. >> can't make that up in volume, can you? you have to make that up from the back end. sprint is making it so they have no choice but to pay the subsidy. no choice. >> on the data plan.

>> and we haven't even talked about the impact on facebook, open table. yelp yesterday. skull candy. >> don't forget, i had ma lineal media on. the advertisers pay up. this is so big. david, i'm having trouble. i cannot send a tweet. >> it's a terrible picture. >> it's a cute picture. in the meantime, let's talk about some of the interesting calls come out of citi this morning. a firm for one downgrading intel all to a neutral on weak pc demand. nic nike, also getting a downgrade. the chip one is surrounding pcs. we've heard this all before. seems like they're gloming on to what analysts have downgraded. >> it was a penguin pile on. look, intel is cheap. doesn't matter. hewlett-packard looked cheap. there's a secular change here. your desktop.

when i first got to goldman sachs, we had ibm selectrics. there's like videx and then they're all gone. they disappeared. >> no more liquid paper. >> i started on a typewriter, was it epson? >> epson had printers. they have computers the first computer? >> all i can say is that this is something we don't need. look, we're supporting it. one day, it's just going to be an ipad and we're going to be typing and watching games. >> the news in this citi call is they don't expect a bounce because of windows 8. then jefferies saying that win 8 has the potential to underwhel m. >> i've been on the beta windows 8. i kind of like it. you're not going to pry my cold dead hands from microsoft, but apple is, i cannot, there's no

way you can overemphasize the hold that apple has. i mean, when i was with referencing to mm, you're designing all your ads, html, facebook picked the wrong operating system. they didn't pick the wrong operating system for android. for apple. apple is in charge more than ever. lighter, thinner, faster. 4g. more battery life. i rest my case. >> my favorite moment as the launch was happening yesterday, in our office over the cubicle walls, people were suddenly talking about sapphire and lightening. it's like a national event and just sort of rolled over the country and offices all over, you can imagine that same conversation taking place. >> did you ever see anything like this? where we all stop and watch brian sullivan talking about what comes out. >> we used to put a man on the moon and everybody would pay attention. >> what was on the moon? mcdonald's?

who wants to go there. i cannot emphasize, this is not water cooler talk. it's shut down your business and talk about apple talk. water cooler means you're not doing it at your desk. no, this is not. this is mainstream. are going to upgrade. >> the numbers work on this device in terms of earnings, cash flow, revenue, everything. >> and it's bigger than all the other tech stoms. >> preorders begin tomorrow and i think shipments begin on the 21st of september. >> can you jump it? >> i think i might be locked into my 4s. >> you're going to pull the i am jim krcramer and i need my ipho 5. i once sold a parking spot in santa monica. >> did you get the to 20 bucks? >> haggled it down to 10. not bad. free spot that i got ten

minutes. >> remind me not to bring you in on my next deal. >> congratulations to the street and the news about the deal. >> nice. >> making all the papers today. new picture of jim in the "new york post" this morning. >> do you think that picture looked good? >> would you like me to take one of you? >> yes. >> how do you use this thing? when we come back, the man behind the fashion force known as j. crew. millard drexler in a live interview. another look at futures this morning adds we await the fed this afternoon. "squawk on the street's" back in a moment.

in case you didn't get the message on your non apple mobile device, apple unveiled the new iphone 5 and turns out many rumors describing it were true, something surprising for a company known for keeping a tight lid on its products. what is the best way for apple to keep its secrets moving forward? tweet us. we'll air your responses throughout the morning. that was what was so shocking about this. there are so many apple blogs. dime a dozen and they got it largely right. >> they did. one of the reasons i think that was apple's design is if you read the stuff, you say i'm hearing a lot of things. maybe i will order.

there's enough in there that i like. there's a loft features we don't have now. >> the one thing, no -- communications. that was the one thing the blogs might have gotten wrong. android devices have it. you can exchange information quickly. >> this has a future i love. it's called passbook. one section. that's going to be the big break away section. research, blackberry does not have that. >> no. >> he's switching. >> the enterprises, our employer is allowing us to use iphones. you've got one. >> yes. and soon, so will you. >> and in part, i have to say one of the rbs i was encouraged to is you never know what rim is going to have or not have. we've got to transition away from rim. that's a frightening thing. >> rim to merge with -- >> they're huge in jakarta,

don't forget. >> everybody has a blackberry in jakarta. >> the year of living with no profits. >> up next -- up next, running for profits, you want to hear what cramer has to say in his mad dash, an exclusive interview with millard drexler. let's take a look at futures. we're up akroz the board. stay tuned. . a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. but i'm still stubbed up. [ male announcer ] truth is, nyquil doesn't unstuff your nose. what?

[ male announcer ] alka-seltzer plus liquid gels speeds relief to your worst cold symptoms plus has a decongestant for your stuffy nose. thanks. that's the cold truth! with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

big half hour with millard

drexler, but first, the mad dash with jim about six minutes before the bell. a lot of retail housing stories. pier 1 leads that list. >> it's been the best story, just incredible. traded for under 25 cents. this is an amazing story turn around. a housing play. i cannot emphasize how powerful this retail housing intersection is. >> remember when these guys could not get out of their way? every month was a disappointment. >> if you go to the stores, they have tremendous seasonal. they'll be rolling in their thanksgiving stuff. i urge people to check out the merchandise and you know why there's a turn around. >> kayla reporting yesterday, abercrombie trying to fend off. >> citigroup says sell it. i'm not a believer in teen apparel because i have teens,

you have no idea what they like and don't like. my daughter hated madewell, then dad, i need a $500 give certificate to madewell. gave her a $200 gift certificate to true religion, only bought a half a pant. >> i've heard you say nice things about urban. >> anthropologie has gone the way of pier 1. urban outfitters is really breaking out here. this is a winner. anything with housing related, urban is a lot of apparel, but it's on fire. >> how are you going to know when valuations on these kinds of name rs truly stretched? we've been hearing it all summer long. >> i think you'll know they're truly stretch when the analysts actually have their numbers beaten. in other words, they take estimates up, they finally start believing and then it happens.

then you don't want to be in the stocks when the numbers are no longer expected because the analysts are suddenly comfortable. that's scary to me. they've been abehind. >> what an amazing sector to watch. >> target, walmart, it's back up. kohl's back up. these are incredible moves. we are seeing incredible moves. this is where the action is. although i like royal caribbean, but these are all stocks that are coming back. >> on the other side of this break, we will get the opening bell with jim, david and melissa, then millard drexler, a live and exclusive interview when "squawk on the street" comes back. [ male announcer ] what if you had thermal night-vision goggles,

like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. the dow up five out of six, nine points yesterday. still the highest close since december 28th, 2007.

and there is the opening bell at the big board llr energy, oil and natural gas producer at the nasdaq, a provider of voice and multimedia infrastructure solutions. so, let's get going here, talk about some big movers. we are getting a board meeting at ford. they're going the talk about ceo succession. rationalizing some european ops. they've got some decisions to make over there, jim. >> i tell you. you saw it on one page of the journal. gm with op el, ford, everyone thinks they can rationalize europe easily. they've got bad work rules there, but until you see the losses reduced in europe for ford and gm, those stocks aren't moving anywhere. it's on hope they can get it rationalized. united states is on fire and everyone keeps saying why can't we buy ford. because of latin america and europe. >> facebook, a bit backward looking, but the best day yesterday since that ipo.

it's almost you can't say ipo without saying botched ipo. that's the way everybody says it. was there a turn yesterday? >> i think that you're going to have a well p like situation is what people hope. yelp was a giant lock up that expired and all the shorts were piled on. it went up seven. you have to bet that everyone is overly short facebook to get this thing going. i think it's more of the dynamics of the lock up in actual earnings. >> the big lock up is coming november and by november, we'll have more than a million shares hit the market. >> that's a big lock up to overcome. >> aig was remarkable. had 600 million shares hit, but aig of course was valued at half book. facebook, not valued at half book. >> taking a look at the financials, it is worth noting because xlf closed at five-month

highs. taking a bit of a breather today. bank of america down. but that is worth watching. little pause here in this rally that we've seen in financials. >> lot of johnny come latelies. bank of america is the key stock to watch because a lot of people feel this one had the momentum and therefore, this was like a beacon for the bank stock movement, which was the backbone of this last rally. that's got to continue. >> all right. >> i don't know if it can. >> they never seem to miss an opportunity to miss an opportunity at bank of america. so we'll see. >> so, they are always missing an opportunity. >> correct. >> that's not mine. >> it's about the new york mets. >> said about the mideast peace process many years ago. >> i like it. >> david, a lot of discussion about eads and bae and whether or not boeing would become a number two defense in aerospace, company on the planet. >> and whether potential for consolidation.

we had a huge round of consolidation in the '90s. haven't seen a lot since then. it would be a very big deal, important deal, eads, british company focused on defense. a lot of regulatory hurdles to go through there, so while they are in discussions, it's not clear it's going to happen. you've got to be thinking about it if you are a boeing. there's no doubt you've got to at least consider what it means for your position. these are the defense spending worldwide. >> and it's been a sickening decline because people are worried about the fiscal cliff and now, this newfound competition. boeing has a big cycle in the dream liner and that has often determined multiple year moves in boeing. i love management there. >> still watching the apple derivative plays in terms of the iphone 5 launch. what they announced in terms of features and how that is impacting other companies. we mentioned skull candy before

with the relaunch of the ear pods. they stay in your ear longer, better sound. skull candy is down by 2%. open table, down by about 2%. >> how about pandora? >> seeing a pop. no mention of an internet radio service, with the overhaul of itunes. >> spoti fy, $4 billion valuation. they can get away from anything as we know from the botched facebook nuance. herb greenberg, morgan stanley says tht the play off the smarter siri. remember, siri was not that bright and you often, you could not get apps with her and ball scores. wouldn't you love to know the score of the phillies game now three back by just saying, siri, how did the phils do today? >> and you can ask it in mandarin, if you want, since she's learning chinese. >> you can work on that.

>> whatever it takes to get that score. >> the phillies are only three back, right? with 19 games? >> will the phillies win? how about the eagles? that's the siri that i want. >> phillies were only three back? >> for a wild card, but still. >> if they get in, they get in. >> cardinals playing l.a. phillies play seven straight games against losers. we're back. we're bigger than ever. >> let's go to bob pisani who's here with what is moving. >> let's talk about qe3 because that's all these guys are talking about here. the risk is to the downside. at least that seems to be the consensus. the market, everybody's anticipating some type of qe3 right now. three quarters of the people i've talked to think it's going to come today, so if it doesn't, there's going to be some disappointment here. if the fed postponed qe3 or implies they might do it in december or 2014, i think that will be a disappointment. just extending the low interest

rates into 2015, which everyone talks about, down here, the thinking is that's not going to be enough and even just an operation twist type announcement also likely will not be enough. will be a bit of a disappointment to the markets, so some kind of qe3 will be necessary to move the markets forward. there's a minority who thinks even some kind of modest program may not move it forward. but if there is no qe3 at all, then you sell some of the other risk on trades. you sell the u.s. dollar, the aussie dollar as well and play some other games that are involved with materials and industrials as well. a lot of people would like to see a modest sell off. people are not all out long and a lot of people have underperformed, so a drop in the market would bring them closer to the market activity and a lot of people would like to buy at lower prices. on the european situation, the dutch elections, a huge victory

for the people who are the pro euro crowd. the far left and right parties, which it campaigned, anti euro, all lost and they were the ones that were supporting a pro euro policy. >> fxc. euro's been okay. people like the euro. great story, but it's bonds today. that's to me what's operative. rick santelli's the cme chicago. >> thank you, jim. big conventional wisdom. no matter where you look, it's a same notion and that is yield curves steepening. whether it's spain, the u.s., whether it's germany, we want to pay attention because more often than not, we are looking at very oversimplified, but very realistic interpretations of short maturities performing better, getting more into the reflation camp. august 1st start on a two-year

note yield. contrast that with the ten-year. let's combine the two with a spread. boy, you can track it as you go into fed meetings, euro, dollar, index, they'll really -- it's dropped over 4%. back to you. >> coming up next, a heavy hitter in the retail world. j. crew's ceo millard drexler in a live interview. hear what he has to say about his business and the state of the consumer. and take a look at this morning's early movers here on wall street. [ male announcer ] for the dreamers...

and those well grounded. for what's around this corner... and the next. there's cash flow options from pnc. solutions to help businesses like yours accelerate receivables, manage payments, and help ensure access to credit. because we know how important cash flow is to reaching your goals. pnc bank. for the achiever in you.

pnc bank. a thing that helps you wbuy other things.hing. but plenty of companies do that. so we make something else. we help make life a little easier, more convenient, more rewarding, more entertaining. year after year. it's the reason why we don't have customers. we have members. american express. welcome in.

that song's been in my car a lot lately. it's fashion week in new york city. one name you might not always associate with top designer, j. crew. it presented its wares earlier in the week. the retailer has not only been populating the runways with its classic styles, it's been putting up some impressive same-store sales numbers. one reason drexler continuing to earn the title, the merchant prince. i don't know if you like that. >> i don't. my aunts do. >> better than the clown prince. >> 21% overall growth. you have some bondholders and significant same-store sales growth and especially given what a year ago looked like, really impressive. can you keep that up and what was behind that strong quarter? >> i never planned to and we never planned to keep double digit growth up. we never plan it, because then

you buy too much inventory, then have to take markdowns. we always plan conservatively and when the good are good, marketing service, then you do well. that's the nature of the beast. >> so, what worked well? you and i spent a lot of time together for a documentary that aired last spring. what worked well? >> constant, daily, day in, day out product. improvement, product detail. creativity, important and always bringing to the consumer, something new and something old and comfortable and consistent. what works well is paying attention to extraordinary detail and not growth for growth sake. so, i'm not forecasting double digits. in my business, for years, i've been doing this for many years. it's kind of like a w in our world. it's never like a straight line upward. >> i wanted some fashion stuff. yellow? >> what works well is the mini

pant, pixie pant, men's bowery. >> i like the price point on ludlow. >> that really works well for us. we are a designer company. we're a design company and we're not a six times cost company and what works well is ludlow suits and woman's collection, italian fabrics, japanese fakbrics made in italy shoes. >> you are excited and exciting. now, that is something the four walls of public companies where the analysts get on and they nitpick about your gross margins. those are over. are you now free to do things you could never do before? >> we were always free. the the only thing different is we had to explain ourselves every day of the week, all the time. it was aggravating, but it's

life, by the way, you deal with it. but if you're running a public or private company, the objectives are the same. run it for the long-term. unfortunately, that's not the way the world works. >> but you can afford to miss mow. no one cares. >> we care. we care as much. it's the same. you're a little more free not to deal quarterly or monthly. >> conference calls that are anoing. >> i felt so bad for you. >> yes, and when you get second guessed on a color, it's kind of silly, but that's life. we all have to deal with that. i've been in public companies now for most of my adult life and now, it's private. it's really nice, but our investors and great partners. at some point, going to want to do something. >> you mentioned something about discounting. and sales. seems to be rampant. >> rampant. what is that, how does that change the dynamic?

>> frankly, it's a huge dynamic and you know, when you connect the dots backwards, it's going like this in the world. >> so, it's increasing. >> it's really simple. how often do you hear of companies talking only about their products? they talk about how many stores they're opening. they talk about international. i wonderf what goes on behind te scenes. what's the customer going to like and not like? you can't even talk about sectors anymore. you have to talk about what you're providing for the customer. there are too many retailer, too many brands, too many designers, too many discount stores and online companies are selling discount like crazy. >> in the fabulous documentary you did, you were in italy, bought the fabrics like this. i paid a fortune for this suit. you buy the fabric where i get the fabric, then you go to where they can put it together. >> we do what everyone else does except we sell it ourselves. any company with a great name

designs. we go, make it and like to control it and sell it ourselves. >> but you're talk about a world in which we seem to be overstoreded and overclothed. inevitably if you follow the capital markets and markets, that means something's going to give. >> that means rampant discounting and at the end of the day, high integrity carries all on product and long-term. >> what about high-end because we've been talking a lot about that. we were talking this week about burberry, which put up some numbers that are not good. a lot of questions about the chinese consumer. you deal with the high-end. across the board, but have a lot ofclothes. >> what we always find and no one in our organization get away with, it's not macro. in any marketplace, there are luxury companies that do really well. why?

because they run great product businesses and are not rampant on overexpansion. you have to look at it deliberately and long-term. pay attention to detail of what you're selling your customer. >> obviously, what you said was there are guys who can consistently deliver. you go into the mall. what are you jealous of? i want to do better than them. >> a few. i'm not going to mention names. i never would. i'm jealous of people, costco's a great company. that's a great company and not in the apparel business. i'm jealous of companies that own the space. they're in a marketplace where they own the market. they're dominant in a very focused sector of the business. i'm not jealous. we try to do that. if you look at what we're doing now, dominance by category and item. it's not a matter of jealous. just always trying to do better and be as good as everyone else. >> but you're not seeing this broad weakness amongst the high-end. >> give me some sense. >> at some point, people are

going to stop paying as much money as they're paying for logos. people are going to go online for every product in the world and say what's the best price out there? i do that. personally and professionally. at some point, the more there is of anything, the less desirable it becomes and the world today is the standards have been lowered and more people are wearing more products from every designer and the dilution of designer names is is extraordinarily fast because they're selling all discount stores with products and with deals. >> how great is social media as way to be able to leapfrog the other guys, become hotter, facebook, twitter? >> look, here's what i say to the organization every day. show me the numbers. show me what's going on. i think without running a great business, there's a lot of conversation about social media. i'm yet to see a correlation in my industry between great social media and great numbers. you've got to be there.

but on the other hand, it's a very hyped up thing right now. we're in it. >> not seeing an impact from it. >> we're in it, but i don't want to team to think it's the be all, end all. i want them to know it's part of the total mix of the business. like everything else in the world, the pendulum swings broadly. social media's a nice thing to have, but it's not going to make you grow your apparel business and accessory business long-term. the product will. the service will and your markets will. >> we brought you here to talk j. crew and retail, but you are an apple board member. >> yes, i am. >> going to buy an iphone 5? >> absolutely. >> already have one? >> no, we get it one everyone else gets it, so mine's on the way. >> apple board member, apple executive, ron johnson, goes to j.c. penny. are you worried whatsoever? >> no. look, i worry about someone with a sewing machine.

ron has an enormously challenging task in front of him. >> why? >> to take an institution like j.c. penny and turn it around, first of all, nothing's fast and i have an old story. drive businesses with creativity. and i think you need to take a business that's been around for million years and i think you have to figure out where the space is where you can compete effectively. i never want to compete on price. in my history, because on price, you don't always win, but we'll see what happens. >> how are those board meetings without mr. jobs? >> i miss steve terribly, but i think tim is doing a really fantastic job. >> appreciate you being with us. millard drexler, ceo, j. crew, lot more "squawk on the street" ahead. still to come, the number 6

is special to cramer, too. six stocks in 60 seconds is on his mind. and ours. all that and more when we return. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments.

the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.

if you've rebounded from that amazing interview, time for "six in 60." cr measuring. >> lot of talk. morgan stanley. lot of firms saying red hat, the cloud is back. up 23. cloud is is back. >> ubs takes north rupp. >> this is that problem with the fiscal cliff. inexpensive stocks. >> barclays takes ups to a hold. >> negatives are in. i'm going for positives here. >> cliffs natural. >> the interesting thing about this, they say the dividend is safe. that's important because a lot of people thought that was going to go away. >> red hat's a mover. buy at jefferies? >> this is an inexpensive play. they're doing quite well. this is the real estate invest

m. i doubted this company at 100. these guys are brilliant managers. i stand corrected. >> what's coming up tonight? >> okay. joy. as in joy global. now, thises the company uniquely related to china and coal. cyclical decline, how are they going to do it? i got to find out. >> interesting. we've seen a lot of mining companies scale back their expectations. we had barrick this week. >> and brazil talk about scrapping projects. this industry is china. and until china reaccelerates or people think it's going to reaccelerate, they're buying now. these are stocks that are sells without china. >> we'll see you tonight. >> thank you. >> great show. when we come back, wall street on stimulus watch. of course, it is fed day. we'll talk with the bank ceo who once served on the bank's 12-member federal advisory

counsel. what does he expect to hear from bernanke? "squawk on the street's" back after a break. something very inn common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. bob...

oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

in communities across the country. whether it's supporting a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone.

let's get to the road map. "squawk on the street," the countdown is on in today's fed decision. what is that going to mean for the markets, rates and commodities prices? >> plus, how to play apple now that the iphone has been revealed. how are the carriers being revealed? then, the -- to talk hurricane season and much more. all coming up. >> today's rate decision, second to last before the presidential election. the fed finds itself becoming something of a political football. our senior reporter steve liesman is in washington with more. hi, steve. >> hey,ed a lot about it, we can talk more about how the market mikt react, but what about the political establishment? you can expect some reaction either way. the fed not acting will be viewed here in washington. the the fed not acting will be viewed the same way. this morning, maybe you got a taste of what could happen.

george will wroit iiting in the "washington post" saying when the independent fed buys bonds to affect short-term stimulus by manipulating rates, this is less than monetary policy, which is the business of an accountable congress. also is a propostrouse allegation by the fed as the economy central planner. a role beyond the fed's or anyone else's. you can imagine that there are a number of of republicans who feel the same way. i don't know if there are many democrats, probably more than a few economists who feel that way as well. all of this engendered a response from dean baker. more from the left, the center for economics policy and research and he is saying george will fails to -- the trade deficit. baker says it will lower the dollar. there's also zero evidence of the hyper inflation he and others of more aggressive fed actions have been warning about

for years. we're going to view this decision at 12:30 today through the markets, but also view it in this heightened political climate. but let's get to policy. the fed said in the minutes to the august statement that it would act fairly soon unless we had a sustainable and substantial recovery. what i did is put together a last two months of data and this is really come in since that fed meeting in august. there's the payroll average, 118,000. unemployment rate just down a tick, really. 0.1. retail sales up just a tad. business investment has been down on average 3% over the past few months and the only upside has been residential construction, so certainly, simon, you could say it makes the litmus test the fed gave us in august. >> i have raised this political

issue with you for weeks and for week, you've told me that the fed will ignore it. are you suggesting now that might not be the case? >> no, i'm not suggesting that. i think the fed is going to act. what i'm interested in, simon, is that once they do act, it will be viewed through the political prison m and i think it's going to be a political issue. i'm on the record saying i think the fed is going to act today. certainly, the survey results show the market believes the fed's going to act today. i think had the fed wanted more flexibility going into this meeting, the federal reserve could have used its communication channels to really dissuade the markets and it didn't do that. so we go in with a 90%. if you look at our fed survey, thinking it's going to be qe in the next 12 months, thinks it happens today and the figure is going to be $500 billion of qe. i think the fed is going to do so. my only point is that i believe from this day forward, no matter

which way the fed goes, it's going to end up being an interesting political fight. >> romney has been very explicit. he doesn't want ben bernanke at the helm of the fed. it is politicized. >> it is. i don't think bernanke cares. i really don't. i think bernanke and i think other members of the federal reserve take their independence very, very seriously. i do think they know it doesn't happen in a political vacuum that there could be backlash, but my guess is it's not going to have a big effect. i think when they look at the numbers, they put out the test in august and when you look at the numbers, simon, you tell me your take on those numbers. do those look like we've had a change at all in the pace of the recovery? we're still looking at 2% gdp so, it's hard to say that hasn't been met. >> i have no opinion, steve. i'm just a conduit. thank you, steve. >> my pleasure. >> all right, as we wait for the big decision from the fed, want to talk about the potential

rates in metals. a futures specialist with city. guys, good morning. interesting change between simon and steve. if you look back at the past 15 or to election years, they're not afraid to act in a september or october time frame, although i'm told the fed tends not to act when stocks are at multiyear highs. what is your best read about what they do today? >> that's a very fair point you make, but if you listen to the fed, will they be saying all along is they're missing on the mandate. the full employment mandate. the inflation mandate. you know, i think financial conditions, you make a good point. they're not at stress levels. if you look at qe 1, qe2, they acted when conditions were weak. deflation risk was high, so that sort of gives a pass to the fed, but they're still missing on the mandate. if you look ahead with the fiscal cliff, i think there's a huge downside risk to the u.s.

economy. i think we're going to get accommodation. the big question is do you get accommodation. >> and your view is? >> our view is you definitely get the forward guidance. it's a really close call. if the fed was to do qe 3, an open ended program is more likely. it's just a very aggressive program. at that point, we'd have more clarity on the fiscal cliff, but it's a very close call. >> sterling, close call is probably the best way to put it, but when you couple it with what we got out of the wholesale prices today, maybe they give today a pass. what do you think? >> i think we have to give today a pass. i think you see a change in verbiage. we're on the precipice of seeing food inflation. if we get that coming in with

food, that is not going to be good for the economy and you could end up with a situation that is really self-defeating. >> i'm just curious. say we have an extension of the forward guidance in terms of keeping interest rating low. how will that be reflected in the bond market and rates if ben bernanke's term ends january 2014? i'm just curious. wondering if there could be an opportunity there. you know, if it's reflected in a certain way and there's a chance he might not be there to implement that. >> right. that's a good point. you know, bernanke's term runs out in early '14. because the current guidance goes out to late 2014. the market currently is priced for april or may 2015. so, even though i think the market knows that january 19 may be the chairman in 2010. the markets will be pushed out to mid '15. but i think the fed has to be concerned about this. set some infrastructure in

place. set some sort of boundaries that you know, the mandate miss if you may is actually linked to that forward guidance, so what we may get today is not just an extension, but a way for us to understand where we're getting that 2015 from. some rules order statement it's linked to how farther from the mandate. >> the fact is, that said, that inflation, core inflation is rising. you know, the economy, other economies are crawling on their knees, but this has gone to 2.2% in the first half of the year and now, oil prices are beginning to rise. this is a very dangerous situation, isn't it? in which you go through a qe3 at a time when you're not even sure that the benefits are even tangible. >> yes, which is why the fed needs to be very clear that even if they want to embark on qe3 today, it's within their

mandate. i think any talk of allowing inflation to run above the mandate, that's a very serious risk because -- the bond market will panic, so i see your point. i think from the fed standpoint, the recent increase in core inflation is not sustained. any oil price increase, they don't see that filtering through. if you look at wage inflation, there is no wage inflation. it's hard to see a sustained rise in core inflation and you know, to the extent that the structure unemployment maybe higher, it is not 8%. we are very far from where we would be in terms of structure for employment, so i think that gives the fed the ability, but they have to watch the inflation, they have to tell the market that they care about infli inflati inflation. an open ended qe today runs the risk of looking like they may be a little soft on the inflation mandate. if you wait until the downside risks are high, which is why i'd

rather they wait until december. but the big question is how much is the market priced for. i think that's their big question today. >> i want to get to commodity trade for you off of further stimulus. supportive of gold, oil, copper, at the same time for copper, seems like an interesting dynamic is playing out because we have further stimulus coming down the pipe potentially here in the united states. we have china announcing some infrastructure projects, but overnight, we had xinhua saying a massive program would be detriment detrimental. >> i think the copper market right now, china is obviously the key player. if we see definite quantitative easing and they buy the bonds, i think that pushes copper upwards towards the 390 level. it's going to be suggest to extra volatility. if we see europe continue to have problems, we don't cope

with the fiscal cliff correctly, that will undermine the copper market and take it back and it will hover around the 360 to 365 area. >> i can't believe this is going to be the seventh news conference. i remember when these were brand new. april 2011. thanks so much. we'll see what happens later on this afternoon and one of my favorite tweets today, mike bergen, a fake bernanke quote. i put my pants on just like the rest of you, one leg at a time, except once my pants are on, i print money. well said. meantime, will the fed initiate another round of qe? find out today, 12:15 p.m. a slew of guests here on cnbc. 12:15 eastern time. 2:15 eastern, bernanke will hold the news conference to explain their latest move. we'll have it live starting at 2:00 p.m., which is when we get those revised projections. busy afternoon. >> very busy.

>> potential fed action is one reason oil is breaking out and cut hit, the futures could hit $100 a barrel. that with the middle east violence. traders think they know the number oil has to hit in order for the president to trigger the strategic petroleum reserve release. we'll have that after the break. sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, sfx: sounds of marching band and crowd cheering and i found myself in the middle of this parade

honoring america's troops. which is actually quite fitting because geico has been serving the military for over 75 years. aawh no, look, i know this is about the troops and not about me. right, but i don't look like that. who can i write a letter to about this? geico. fifteen minutes could save you fifteen percent or more on car insurance.

oil's hedging hire, unrest in the middle east. traders think they may know the magic price that will trigger a release of the country's strategic petroleum reserves. cant wait to hear more. >> carl, nobody knows for sure when or if the white house will direct a drawdown, but the chatter about such a move has gotten louder as brent futurer climbed closer to $120 per barrel. that's because 120 may be the catalyst for an spr drawdown according to some traders who say the white house has telegraphed that it may release up to 180 million barrels of oil. that's a high-end. the track record of such moves is mixed. back in june 2011, the last time the spr was tapped, gas prices at the pump, the all important

figure on which so many americans are focused, only softened for about a week before climbing back to their prior levels. so in this case, the rumors about a possible spr release which were amplified last week by a research note from citigroup suggesting a white house move may be more likely, may have a greater effect than the actual drawdown given some believe it should be trading at a level much higher than it's at. >> provocative report. thanks, kate. you always talk about the impact of rumor over fact. is the same trend happening with the fed and qe3? >> that's a great question and i have a couple of charts that might underscore what's going on there. what you see in gold, you see a spike in recent weeks since ben bernanke kind of telegraphed he might do something. that was back at jackson hole in late august and you see gold going higher.

however, crude oil has been somewhat muted. but up to then, oil was relatively new to considering what the fundamentals should be since we put trade embargoes on iran and crimped supply from there earlier this summer. >> isn't that the point? the fact they're talking to people like citigroup saying we might have a release from s prp rrk. >> that's right, simon. you've got two different trajectories and two different commodities, but yes, in terms of qe3 increasing, or the telegraphs of the idea of that, increasing the prices of gold where people might go for safety. on the other hand, the government is suggesting they may draw down the spr and you see crude holding steady and not going as high as it might otherwise. >> thanks so much. let's get to jackie deangeles.

>> watching shares of uts and there are some headlines coming out. utx saying it's going to resume share buybacks in 2013. also, the ceo say he sees two to three years of a hard environment in europe. the attention has come off of europe, but this is a little bit of color there, so we're watching shares right now, up about three tenths of a percent. melissa. >> thanks for that. just two more hours until the fed's decision on interest rates. up next, we'll tell you how the play the dollar ahead of the big announcement. back in two. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying

and tomorrow we will up it yet again. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. now we need a little bit more... a little bit more vanilla? this is great! [ male announcer ] at humana, we believe there's never been a better time to share your passions... because the results... are you having fun doing this? yeah. that's a very nice cake! [ male announcer ] well, you can't beat them. [ giggles ] ohh! you got something huh? whoa... [ male announcer ] humana understands

the value of spending time together that's a lot of work getting that one in! let's go see the birdies. [ male announcer ] one on one, sharing what you know. let's do it grandpa. that's why humana agents will sit down with you, to listen and understand what's important to you. it's how we help you choose the right humana medicare plan for you. because when your medicare is taken care of, you can spend more time sharing your passions. wow. [ giggles ] [ male announcer ] with the people who matter most. i love you grandpa! i love you grandma! now you're a real fisherman. [ male announcer ] humana.

traders watching a u.s. dollar, how will it trade before and after bernanke speaks? let's get to money in motion. be go i first want to ask you about

this report that's going around the trading desk this morning, that an imf official says greece may need a third bailoout. are you seeing impactses on parkt? >> i think it will have a negative impact on the euro, but ahead of the fed decision, traders are going to be a little reluctant to do anything ahead of the actual fed decision. >> citi is recommending selling euro u.s. dollar on h decision. is that where you fall? is. >> i think bernanke has lowered the bar for quantitative easing this time around. but in the interim, the market has seen a rally in risk asset across the board, so now, we're leaning toward the reality that the market could be disappointed if we don't get everything they see. i like selling the euro around 130 with a target toward 125. >> 130 is quite a high level. what do you think makes the euro go to that level? that's a level we haven't seen

in more than five months. >> i think in the near term, the market is positioned to go lower. shorts have been taken out of the market. positive news out of germany with the court decision has provided a move for europe. are we follow iing dollar strenh or -- options market tells us traders are heavily positioned and whatever happens today, we could see a substantial move in the euro. >> stops at 132. that's big compared to where we were a month, month and a half ago. that's a lot of people who got that euro trade completely wrong. what do you think about that? what happened there? >> i think the market was the data coming out of the u.s. was slightly better than expected. we continued to see positive

news out of europe. financial markets are functioning much better. we've seen pressure time when a lot of bank -- off of yields across europe. so conditions have improved considerably and that was a relief trade for the euro. and despite this, the situation, the employment data in particular in the u.s. was quite negative, so the market took that to mean hey, the fed still has room to ease and they need to do more to try to help the economy. >> thanks for your time. >> thank you. >> willie williams. for more currency trades, catch money in motion, 5:30 p.m. eastern time and check out currency class. nintendo hosting an event in new york to reveal more details of its up coming wii console and we're just getting the pricing. julia boorstin has the latest. >> good morning. it's november 18th. that's when nintendo will start

selling its console. there are two versions. the basic is $299. the deluxe set will be $349 and just a reminder, this is a console with a touch pad controller, so that's what really distinguished this from the other ones. the president of nintendo north america saying this will also appeal to hard core gamers in addition to the more mainstream, more casual gamers that nintendo usually appeals to. in addition, there was the announcement of tv wii u tv saying this is going to be a new way to help people find and watch tv. they are announcing the details right now, so we'll be back with more of that. >> what is a touch pad controller? what difference would that make? why is that the great breakthrough? >> this is yet another reason to try to convince people to buy a console as opposed to just

playing games on their smart phones and tablets. quite a while ago, we got demos at e 3. instead of controlling your console game with waving your hand like with the microsoft x box or waving a controller around, you could move your hand on a touch screen controller. it's a more interactive, engaging way to play the game and just really another reason to try to get people to buy and invest in a console. >> thank you very much for that. when we come back, breaking news on nat gas inventories and shares of royal caribbean rally, but what about the impact of rising oil prices and the heavy start to hurricane season? we'll get answers to those questions when royal caribbean's

president and ceo joins us in just a few minutes. ♪

[ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

good morning if you've just joined us. 7:30 on the west coast. 10:30 here on wall street.

jpmorgan is reorganizing its corporate and banking division for the second time in three months, divided between banking, market and investing services. the latest in a series of changes following the massive lond london wale loss. freddie mac will get an additional 2.2 billion from banks over soured mortgages. and on the employment front this morning, the number of americans finding new claims for jobless benefits rose more than expected last week with several states reporting an increase related to tropical storm isaac. initial claims for state unemployment rose by 15 thourk. breaking news on nat gas inventories. sharon epperson has that. >> hi, carl. we are getting word from the energy department, national gas inventories rose by 27 billion cubic feet in the last week.

tropical storm isaac, the shut ins there contributing to the fact we have smaller injections to storage natural gas. that for this time of year, normally, it's somewhere between 70 or 80 billion cubic feet, but also keep in mind we've seen a serious reduction in the level of storage since say march. now, it's only about 10, 11% of where it was last year. and we are seeing prices coming off here a bit as well because of the cooler temperatures that are expected across much of the country in the next couple of weeks. we're going to keep our eye on whether or not there continues to be interest here. we rose above that $3 mark and in fact, hit a one-month high yesterday, rising about 40 cents in three days. now, we might just see some profit trading. >> thank you so much. let's talk about apple for a moment. the iphone 5 to come with a

lightening connecter and larger screen. yesterday's news saw a dip in the stock initially, but how's the company going to fare going forward? shaw, always good to have you. welcome back. >> thanks for having me on. >> i take it you were relatively impressed? you're going to 820. what's your thinking? >> yeah, it's like you said. iphone 5 was the big announcement even though it was expected, we still think it's going to be a big product driver. a product driver. big product cycle and if you look at last year, the 4s was minor and they sold a lot of them. we think this year with the bigger screen, the faster 4g pyre wireless, plus the maps application, we think it's going to drive a very powerful cycle. >> you're taking up your

september forecast to 26. december from 45 to 46. but you still think that judging from supplier checks, there are going to be some production constraints. why would the roll out be so broad if they didn't think they'd be able to meet demand? >> i'm still trying to figure that out. i was recently in taiwan and i met with a couple of suppliers and this is an area with a new in cell technology. there's some concern. it is a new technology. and with other new technologies, initially, the yields are low and the ramp is a little slower, so we think in the beginning, it could be a little tougher, but we think it gets better as we go into the march quarter and beyond. >> and how about when we work our way into october. the time of a mini ipad, is that going to be positive for the stock? in the weeks following a major

launch, the stock tends to paid. >> there is potential for an ipad mi nni launch in october. we'll have to see. there's also a possibility it could launch you know, in q1. it's possible it could launch next month. >> but shaw, if you take a look at the price points of the various products, the price of the big ipad, if you will, has fallen. the price of the iphone has gone up, which would leave only a small area in which the ipad mini could be priced. what does that tell you about potential margins? are we des tined for a squeeze when the ipad mini launches? >> we think the iphone 5 is going to have a near term effect on margins. we think that's why apple guided the 38% in the current quarter. but for the mini, we're hearing

because it uses the current, a lot of the same components that the current ipad 2 and it has a smaller screen. we're hearing the margin profile will be decent. obviously, it will depend on what they ultimately price it at, but if they priced it at say 299 or 399, we think the margin profile will be quite attractive. >> a lot of the enthusiasm on the street has surrounded the size of the rollout, right? the product itself, people argue, relatively incremental. the differences between android phones and iphones is getting smaller and smaller over time as others catch up. you've had calls on the likes of rim in the past. is apple losing its exclusivity so to speak? >> you know, we, the thing that's really interesting yesterday, right, the refinements they made to itunes, the headphone. it's called ear pod.

the subtle refinements also with the iphone, the ease of use, better screen, better hardware. we think it takes them actually makes them even tougher for competitors to beat. we may not see the big leapfrog, they're actually incrementally making the platform even tougher to beat. >> interesting point. see you next time. >> thank you. >> the iphone 5 is expected to be the best-selling phone of all time, but will it sky high subsidies devastate the bottom lines of the wireless carriers? craig moffitt is an analyst and joins us now to break it down. good to see you. if we are to believe stock prices and what they are telling us, it would appear that verizon is going to benefit the tmost. is that the truth? >> verizon the probably in the best position for the iphone, but to be honest, the large cap

tell cos are trading more on expectations for easing. >> i read that verizon's cfo gave an interview and it was quoted in reuters. it said verizon would pay about $449 for moefs the phones it sells. >> the iphone is double edged sword for the carriers. maybe more negative than positive. on the positive side, it helps drive more use age and they're obviously in the business of selling usage. their new pricing plans are designed to take advantage of that. on the other hand, remember who's getting these iphones. the growth rate of the postpaid wireless industry. the contract wireless industry by subscribers is now just 1% if you include every kind of connected device.

tablets, wireless dog collar, phones, you name it. you've got about 1% growth. if you just take the phones themselves, you're now negative growth rate for that industry. so you're not getting real subscriber growth and those aren't the customers who take iphones. the customers who take iphones are the people who have spart phones and already paying for data plans. you're getting all the cost, but not that much of the benefit. what you're hoping to get is to be able to off set that with more usage. they're faster and customers are going to use them more and hopefully stay longer and so you'll have low return rates, but it's not easy to make the math work when you're already talking about customers who have smart phones simply getting a new one instead of the cycle we've been in in the past where feature phone customers are upgrading to smart phones for the first term. >> you're focusing -- some of the hedge fund managers, which

it's not clear it's sticking at that much higher for a lot of the carriers. that they're able to move everybody up to those much higher price points. >> yeah, that's right. the new pricing plans, remember, these companies, that is verizon and at&t, made a big splash by moving to family data plans and what they're hoping to do is remove the threat that's technologically based on voice revenues and texting revenues, but lumping it all into a single access charge and charging for data. the question for this point, to get people to do that, you had to give them a little bit of a price reduction to get them in the door and the hope is, you make it up with more usage. i think there are reasons to be skeptical that customers are going to end up paying for for their data plans. >> we're looking at two stocks. at&t and verizon, that have had great runs. in part because of their

dividends, but again, i hear pause on the part of some inves to . but these multiples are high. >> verizon is trading about 18 times earnings. historically, trades at a discount to the market multiple. if it were trading at its historical, it would be trading about $31. right now, about 44. remember, these are companies that verizon and at&t, that on a consolidated bases are growing at less than 2% service revenues. only around gdp or less and paying very, very high multiples. the reason for that is they've become bond surrogates and my fear is that people have bid them up high valuations in chasing a dividend yield and the underlying equity value don't make any sense anymore.

>> thanks for your time. s&p telecom sector today hitting its highest level since january 2008. >> royal caribbean shares also rallying. up about 20% since the start of this year. the company also increased its quarterly dividend by about 20%, but what about those rising oil prices? we're going to speak to the head of the company's international division, adam goldstein, next. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty.

here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

. the cruise ship industry continues to recover from carnival's tragedy off the italian coast in january. now, we're coming to the end of the all important summer quarter when expensive european and alaskan cruises contribute most. royal caribbean is hiking its

dividend by 20%. in a first, adam goldstein joins us now. good morning. >> good morning. >> so, you're back up to 12 cents, not quite the 15 we had in 2008. why do this rather than attempt to more rapidly return to investment grade status? >> well, we're trying to balance a number of important objectives. deleverages would be one of them. allowing a good growth program going forward. it would be another one. but increasing shareholder returns, so our sense was moving is navigating the right path. >> where are we on pricing? some indicate you're not having to slash the price at the last minute to fill the ships. >> early in the year, we were in an environment we hadn't faced before. but in fact, what has happened has been mostly what we sort of anticipated. the effect of the accident was primarily felt in europe. it would be primarily felt in

the second and third quarter and demographically, it would primarily effect people who had never cruised before who didn't realize how safe of a vacation this was. >> as you look into the first quarter of next year, how far are you booked, what is the pricing like and is the window, the length of the booking, extending? >> we will have an opportunity in a month and a half are our next call to give our next set of guidance. if you look back to what we said in july, the effect of the accident has been waning. most of our product range has been performing well. the european area is affected both by the accident and by the different mack owe factors affecting europe. but we certainly look forward to the future with optimism, but we don't have a lot of visibility at this point. >> what are you seeing at the european business? why so many analysts or some, have lowered their estimates on rcl. what are you seeing there in

terms of demand within europe for european cruises and also, the ability of people in the united states to fly over now with air fares possibliy poten higher to take an european cruise. >> enormous holiday market. plenty of people who are still taking holidays. unfortunately, we've had to discount our prices there more than we anticipated to get volumes of europeans on board the ships. that's just been the reality of 2012. we have been able to shift some of the sourcing to attract north americans to come over to european cruises. but they also confront high air fares. >> you're cutting 10% capacity in europe and i think it's china you're going to send some of the ships toward increasingly. when that was done recently in alaska, prices rebounded quite dramatically. >> europe is such a different set of factors than alaska, which is a fairly narrow targeted market.

i think we really need to understand how the european macro situation unfolds. strategically, we had made the decision. we just see opportunity there. >> what about fuel? i think you're hedged to about 56%, but that's going to fall to about 13, at a time when the price of oil is rising. >> we've been consistent in recent years. looking forward, 50 to 60% hedge, we're at the high-end of that now. one of the nice things about our business for the most part is that the way the dollar goes, kind of off sets the way fuel goes. >> have you been able to take share from operators from where for instance, someone in europe, they would do just city to city vacations, but say we can't afford that, let's do a cruise, just hit a few major spots that we would have gone to any way, but this time on a boat. >> we say we've got the best

air-conditioning on the mediterrane mediterranean, but yes, it has been gaining share on land vacations in europe. >> do you go with caribbean o a or caribbean? >> very confusing for the immigrants. thank you very much. want to go to los angeles and julia boorstin has more news on nintendo. >> more detail about the new tv program they're offering. it's a technology that's offered for free with all of its wii u consols. this will allow users to search across video on demand platforms. that means it's integrating hulu plus, netflix, amazon and also, your dv rr. search all of your video content in one place. go and watch different kinds of content. it also allows users to create

individual profiles, nintendo will remember what kinds of shows you like and make recommendations based on those references. this puts them in direct competition with microsoft with their, box 360 and sony with their playstation. they're both trying to be the entertainment hub for their living room. this shows the video game makers are try dog more than just games. carl? >> shows how many choices we're going to have in the future as they try to win the living room. still to come, we'll be joined by a member of the joint member's advisory council. what's truly amazing about mercedes new mbrace2 system...

is i can follow all my sports... catch the latest breaking news... keep in touch with friends... follow the financial headlines... find a great restaurant... and with siriusxm i can get weather forecasts... all from here. in my mercedes-benz. [ male announcer ] introducing mbrace2. the most comprehensive cloud-based telematics system on the road. it's your world, from your car. mercedes-benz. the best or nothing. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying

and tomorrow we will up it yet again.

worldwide treatment for hiv and aids can be a lucrative market and with drug sales more than $12 billion annually it's rife with opportunity for cold-hearted criminals. take a listen. >> joya williams is an administrative assistant to one of koch's executives. >> he has access, sees all the flfgs the other executive assistants that are there. >> he's been with the company for less than two years but is unhappy. >> joya believes that coca-cola has not treated her correctly.

they didn't appreciate her good work. >> according to the fbi disgruntled employees can be more dangers to companies than they realize. >> in 2011 the u.s. department of justice pros kutsed 12,000 cases of insurance fraud. it's people who fake an illness and then collect the insurance or fake insurers who say, oh, aisle insure you, i'll collect the premiums and then when you get really sick, do not pay. it's an amazing heartbreaking story. catch it at 9:00 p.m. eastern right here on cnbc. straight ahead, apple unveiling the new iphone 5 yesterday and many of the rumors describing it as true this time around. something surprising for a company that can keep a tight

lid on it. "squawk" question for you. what is the best way for apple to keep its cree caretsecrets m forward? [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.

and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. for the spender who needs a little help saving. for adding "& sons."

for the dreamer, planning an early escape. for the mother of the bride. for whoever you are, for whatever you're trying to achieve, pnc has technology, guidance, and over 150 years of experience to help you get there. ♪

it turns out that the iphone news was new. we're asking you what's the best way for apple to keep its secrets moving forward? boscho writes institute one more thing or even two more things. another turn over development to the oompa loompas. willy wonka reference. i'm not sure. >> i don't get the one about the neck tie. >> if you were on twitter, you'd know. there's david faber's hair. >> i'll have to look at that. before i go i want to mention cable vigs. not as much because of the stock but a story we don't follow often but the huge refinancings going on. we talk about the impact of low

rates. it has certainly been an incredible positive in the investment grade and high yield market. this morning cablevision taking out half a billion dollar and 8 1/2% debt which is going to be a lot cheaper on paper. it goes on every single day. the balance sheet repair, not even the repair but how additive it can be for corporate america. something we shouldn't lose sight of. >> and the volume in the past week or two, some historic levels. just incredible. >> and money keeps moving into high yields. >> what's on tonight. >> we're trading the fed. you think you want to buy gold, silver? not so fast. the traders will give you the latest off what ben bernanke says later this afternoon and we'll have more on any's. >> mac 'n' cheese for all the traders? >> for everyone. if you're just joining us

this morning, here's what you missed earlier on. welcome to hour three of "squawk" on the street. here's what's happening so far. >> we will have another bull equity market. i mean i'm the other way. what i worry about today in terms of the market is the fixed income market. >> we cannot allow that whole part of the world to unravel the way it is proceeding to do now because of a lack of american leadership. it's a big, bad event. it's something we have to worry about. people are not going to be happy. he hasn't done enough. you get that from people. what did the fed do? not enough. and then it's business as usual we go back to look at stocks which i regard as inexpensive. you'll have to pry this out of my cold dead hands. ly not lose this phone except to get the iphone 5. if something can make it so i don't hit battery life by the

time "mad money" is on, i'm a buyer. >> we never keep double digit growth up. we never buy inventory because then you have to take markdowns. we try the best we can do. we play conservatively. when the goods are right, goods are good, marketing service, then you do well. if the fed was to duplicate it, open-ended programs are more likely. it's a very aggressive program to undertake today. it would have a little more clarity on the fiscal cliff, but i think it's a very close call. good thursday morning. live here at post 9 at the new york stock exchange. i want to get a check on the markets as we await the feds. they're usually indecisive going into these meetings but we're up 23 points. citigroup downgrading several names within the pc supply chain, most importantly intel, cut to neutral. the stock is up 3 cents.

it may be at a tipping point suffering the personal portable connective devices like personal phones. also data center technology specialist e quinn knox. they plan to max mitt romney long-term shareholder value. let's get to the roadmap this morning, the fed's decision about an hour away. so with the markets on hold ahead of the fed, although hovering near some five-year highs, is another round of q.e. needed? plus one tech titan gets play here. google's augmented reality glasses. yes, taking a spin down the diane von foss tenburg runway. and we couldn't go too long without mentioning the iphone 5 but what about the rising concerns of the connector?

you're going to have to get one. but first from more on what's expected from the fed, russell gold smith as we said is the ceo of the national bank, a member of the 12-mem advisory council. russell, welcome. >> great to be with you. >> i don't think i heard this many strategists say it's too close to call. it is a tough call at least for this particular meeting. is that how you see it? >> you know, i think it's always dangerous what the federal reserve is going do. but i go back to the jacksonhole speech when you've about got the sanctuaryman talking about the unemployment action a grave concern, that's a new word and a serious word, to me that's a signal that they're going do something. i think the broader issue, which is as you know, the chairman has been talking about publicly for a couple of years now, he really wants to see the other part of the government do something. the fiscal cliff is really what's -- we don't have a tax policy next year. what are the rates? we don't know what the spending

policies of the government are. are they going to sequester? that's in the minds ofs bypeople all across the country. so i think the fed is doing everything they can with the toolbox they've got given the other part of the government, the congress, in particular, is not doing their job. >> all the same. if you've got draghi doing his thing in europe and if there are come promees speculate on the hill why not let this one go and maybe revisit it later in the year? >> i think you saw the job numbers today. you obviously saw it before they came out. he talked about it, as you say, a few weeks ago. think to do it at the next meeting, so right on top of the election. you know, we all know that fed actions do have a delayed effect. the longer they wait, then they even gotten the tale until it actually impacts. i think with unemployment where the chairman's made it clear that he wanted to do something.

now, can he deliver everybody? i assume so, but we'll see this afternoon. >> somebody said what's going to be the most fun this afternoon, if, in fact, this there is something is to look at it. does lacker walk away? they may be at the end of their rope in arguing further policy. >> i have confidence that they'll do what's right for the country. that's what they're trying to do. they're trying to do what's right for the country. >> sounds like you would like to see something beyond the extension of the window. >> i think so. i think most economists would say this is not going to make a huge difference. as i say, i think what we need to see is some sort of compromise in congress, not just in the short run on the fiscal cliff but the longer kind of grand bargain that the president proposed. that's what we need. business people -- you know, city people -- i have lots of clients. i can give you anecdote after

anecdote, that's why our deposits are up enormously. people are sitting on the sidelines wanting to know what the tax rates are going to be. there's a risk that these guys will not solve it, and then you drive this weak gdp growth right below zero. so people want to say, hey, i'll wait and see. and so it's self-fulfilling. that slows down the economy and that hurts hiring as you saw in today's numbers. >> there's demands. despite where the 30-year is, we come in every wednesday wond wondering why there aren't more applications to refi or purchase. this week was a little bit different. it's been four out of five. >> that's true nationally. at city national our mortgage volumes are huge. i think the kind of business client are. they refi and when rates go down, they refi again. they're working every edge and we're seeing, you know, in

california and new york, we have offices in both places. housing prices are in good shape. you may not have seen it. it's above the peek ak in '07 a '08. i think you're right. at these low, low rates people would be advised like corporations are doing to readjust their balance sheet. >> sure. have you seen -- i wonder. i was in texas the other day. there was a billboard, check out these rates for a 15-month c. dchd. it's 1 or 2. it's a ridiculous number. >> i think the reality is banks are a wash in liquidity. city national's deposits in the last four years are up 46%. our loan to deposit ratio is down because utilization. our commissions are up. interestingly enough, surpris g surprisingly enough, in the first and second quarter, city

national had more loan originations. but people are getting the commissions. about half of that are clients fleeing from the big banks wanting to come to a regional bank like city national that didn't do all this nonsense that people are rain ain gri about, so, you know, that's helping us too. >> russell, it's going to be an interesting afternoon. russell gold smith with city national. of course, there is a look at the chairman. today, 2:15 p.m. is when the news conference happens, the 12:30 p.m. decision happens during the fasttime half hour. let's get to rick santilli. i know you're always fired up. >> i'm always fired up. i haven't been on the fed floor for a trade since 1979. they always excite me. you know what else excited me, carl? yesterday there was an op-ed called some of the -- what was the exact title? the hidden costs of monetary

easing and it was written by phil graham and jonte lore. he carries some grav i taus with theed if bargaining. even going back before that and what we're talking about is exit ojeta. it seems like a long time ago when they were doing experimental open market operations, just to practice kind of mopping some of this up. but in essence what we're talking about is since that horrible fall of '08 we've seen the fed balance sheet expand by, yes, 200%. and what that article at op-ed talks about is those purchases in particular, they give a bit of a hiding effect to the notion of what they purchase doesn't show up as exterm debt. they don't have to pay the credit back to the treasury interest payments. but when that gets reversed and

that's why i came in, how many times have you heard me stocks go up slower than they come down. so right at the time when we could see economic global victory maybe a number of years down the road. we put up a white flag on the crisis, it's at that time the velocity of money picks up. so the fed is going to be forced to slowly or quickly lose their purchases to try to control money supply and inflation, and that's the part that's going to get dicey. it may be that the economic victory will be snatched from the jaws of the balance sheet. back to you. back to you. thank you, rick. rick santilli. invests are hoping to capitalize on a would-be recovery. diana olick has more on that. good morning, diana. >> reporter: good morning. we know the fed could say they'll buy more mortgage-backed securities from fannie mae and

freddie mac. of course, they've done this before, but the last times were more of a surprise. this time it's going to be more about how much and how wall street reacts. looking back in november of 2008, the fed announced it would buy up to 5,000 billion. and that dropped mortgage rates 85 basis points. even though no mbs had been bought yet, that according to a fed study. in 2010 the fed announced qe2 using treasury purchases, but id did signal lower federal funds rate going forward. mortgage rate did not drop so much. now, in the past year, mortgage rates have dropped largely because trouble overseas and a rush to the safety of the ten-year treasury. mortgage rates fall to the treasury yield which, of course, plummeted. back to today, analysts say the fed could announce anywhere from $3 billion on up in purchases. the question is according to mortgagereports.com's dan green,

what could result? too little, rates rise. if it's above, rates could fall. one new wrinkle is the recent announcement that fannie and freddie will be required to shrink and this could dilute the fed actions because purchases may be off by less gse purchases. today we learn from realty that there are going to be more forecloses. they also may find lower borrowing rates. back to you. >> diana, thank you so much. we've got breaking news. scott wapner is here. i think it involves the city we're in. >> it does indeed. a new development in a story that has drawn intense public interest. new york city has voted in favor of that ban of sugary soft drinks above the 16-understand size. eight in favor, one an extension

in the vote. the mayor's office tweeting the results of that. it goes into effect in six months. the ban would take place in restaurants, movie theaters, and some other places as well. and, carl, as you know, given what mcdonald's said yesterday with its own calorie information it comes as the nation seems to be more focused than ever on the issue of obesity. hard to tell if this is the final say in all of this. there is the group called new yorkers for beverage choices. maybe they're considering a lawsuit for all of this, but at least now a big victory for mayor bloomberg. again, the ban will go into effect on some sugary drinks in six months, carl. >> scott wapner, thank you so much. when we come back the man who test drove the google glasses tell s us what they're really like. can it complete with google+ hangouts. all that next. for 30 some years at manyperint different park service units across the united states.

the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.

let's get a sector check. a lot of indecision ahead of the fed this afternoon. here's one look how consumer staples is doing this morning. meanwhile just in time for fashion week. google glasses making its runway debut during the die van von furstenberg show. it's being released through google+. joining us here at post 9 today is spencer annie.

he's the bureau chief. always good to have you. >> good to see you, carl. >> you got to sit down and test drive these things yourself on monday. >> kind of like winning the lottery a little bit. >> what was it like? >> it was really interesting. the iphone 5 came out yesterday and a lot of people criticized it for being boring. this is not boring. it's basically a wearable computer that is a pair of eye frames, right? they build a computer into the right front of your eye. there's a little computer screen and you can see images and activate it through voice command. >> we're looking at what it might be like to walk around new york city wearing these. what kinds of things were you able to do? >> it's still a prototype so it's not fully baked. basically you say, okay, glass, it brings up a menu and allows you to take a picture, record a video, do navigation through

maps, make a phone call, and respond or send a message. >> he says one of his greatest features is a time lapse capability? >> yes. that's taking a picture every ten seconds. i said what's your favorite thing to do. he said to play with my kids i don't have to take my phone out of my pocket to take pictures of them. at the end of play time i have a bunch of cool pictures. >> britain makes a cameo wearing these. is this -- i mean $1,500 for some of these preorders. that's a lot of money for those diehards. is this going to be a novelty or ten or 15 years out is this going to be a real something? >> i asked sergei that. he said we wouldn't be working on it if we didn't think it couldn't transform the world. he thinks in a few years it will come down. a lot more people will be using it. i will say this. i give them credit for really

advancing the hardware. i've seen this technology 10 or 15 years ago and when i saw an mit researcher wearing it on his head, he looked scary. google made it so it looks sleek now but the big problem is the software. the software isn't up to speed. a lot of the features that i wanted to use, the map feature didn't work, the messaging feature didn't work and as i said in my review a few days ago, what's the killer app? it needs a killer app. >> then you're back to the age-old chickle/egg question. apple, for instance, were criticized for not having this near field communication. why launch something if the ecosystem isn't in place? somebody's got to make the first move. >> like when apple came out, they were like what are we going do with it and apps came out. now there are hundreds of thousands of apps which is the maybe reason you really like the phone. i said to sergei, are you going to open this up like android so

people can play with it and develop cool things you guys can't even dream of. he said he'd like do that but they don't have plan. they want to get it out there, have people playing with it and they'll see what happens. >> it's a great piece. spencer ante. is the iphone a tough one for the enthusiasts? up.

a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪ ♪

♪ ♪ [ male announcer ] introducing a reason...to look twice. introducing a stunning work of technology -- the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. every time a local business opens its doors, or makes another sale, or hires another employee, it's not just good for business. it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we've extended over $4 billion in new credit to local businesses across the country so far this year. because the more we help them, the more we can help make communities stronger.

a young tech company is one step closer to taking on the google hangout. recently announced it raised $7 million in siri a funding. here to talk with us, founded a little thing called stub hub which you might have heard of once or twice. jeff, good to have you on the program. >> good morning, carl. thanks for having me.

>> here you come with this new funding and then on monday, a cast with britney spears. how are you different? how do you compete with google? >> well it's an emerging space. as you said, people are still trying to figure out what everybody's doing. spree cast is the social video platform that brings people together for face to face conversation. we integrate with them. we make it easy to participate and participate in the spreecast. you can embed a spreecast on facebook. there's a lot of tools in place. hangouts is really a single platform product siloed within google+. >> basically for those who are not aware, you have have up to

four people at a time interacting face to face on the screen and have thousands of people watching that skplanch, as you said, through facebook, twitter, through linkedin. how does the mon e tieization work in? >> you can have thousands of people watching. it's very interive for people not on screen. they can text chat, tweet, facebook comment, request to join on camerand a if their question rey quest is approved they can join the conversation. the monetization is something we're working on an plan to roll out over the next six months but we have not yet decided on how to monetize. >> how quickly are you growing, expenses, infrastructure, personnel? >> we're seeing rapid growth. to give you a sense, in the month of august we had more traffic than april, may, june combined. in the last week we acquired more than 10% of our user base. we're definitely growing rapidly and it's an exciting space where

i think people are, you know, showing real appetite to participate. in terms of infrastructure and personnel, we're all kind of on the cloud, so we've got sort of ultimate flexibility in terms of growing our infrastructure to map to our growth and usage. personnel, we're a pretty small company. we've got under 20 employees right now. >> interesting. jeff, i know -- i mean having creates stubhub, you're no stranger to taking on behemoths in established industry but did the prospect of taking on google even in this emerging space give you second thoughts? it gets to be a little daunting? >> we're pretty different from google. sure there's some overlap. the way people are using spreecast, there are four buckets. one is journalists. a second bucket is sort of public figures, celebrities and politicians, professional athletes who are using spree cast to engage with their audience and build a fan base.

third is media and entertainment companies and finally we have lots of social media enthusiasts really to create conversations and die longs on topics they care about. it's different in many ways than others so i think we are different. think we talked about the cross platform features that make us quite different as well it's going to be fascinating to watch. congratulations on the funding. >> thanks very much. thanks for having me. >> jeff fluhr from san francisco talk about spreecast. we'll get the details and a lot more in just a moment. nyqu, but i'm still stubbed up. [ male announcer ] truth is, nyquil doesn't unstuff your nose. what? [ male announcer ] alka-seltzer plus liquid gels speeds relief to your worst cold symptoms plus has a decongestant for your stuffy nose. thanks. that's the cold truth! we believe the more you know, the better you trade.

so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha!

even as we await our own central bank in the united states, still talking about the effects of the ecb on the continental market sniet is now the fed quite clearly. that's what they're waiting for there. some of the banks have taken a little bit of profits on some of those. good news. the european project has jumped through another hoop. in the netherlands, you've had the re-election for once of an existing prime minister, mark richter and he and the liberals will be doing some negotiation to form the coalition. that's the good news because

they're pro-austerity, status quo. that's where you want it to be if yu want it to roll on according to draghi's plan. great news at the italian auction of bonds today. they managed to sell three-year paper -- and this was in total, 6.5 million euro. this is where draghi's verbal plan has opened to the markets. they sold $6.5 million of debt. the three-year payment was actually add a two-year yield. this is a three-year chart we've got here. take look at how the yields have come back down. they lock it in at 2 .75. it was at 2.65 in the middle of july. and the spanish, they've now said they're going to auction 3 billion euros of debt at the end of next week, but they've already tied that up with the local spanish bank. so that we know is going to go ahead. meanwhile at the stock level,

profit taking, big time today on the rally to the extent that we had it yesterday on eads and bae systems, both of those stocks in heavy negative territory. a lot of comments about the difficulty of getting that arrow space merger together. in fact, i thought the colom in the "financial times" was interesting today. they say it's barely started but the defense ministry's deterioration, its downturn has claimed its first notch of the bed postand it's this deal that's being forced through, they argue. those stocks are in negative territory. and, of course, the economic situation remains poor. around europe today, the corporate level in the uk where we have very disappointing sales data coming through from the second largest clothing retailer in the uk. next, other retailers in negative territory there as you can see the chickens come home. it's worth noting as we talk about q.e. and whether or not it is successful.

united kingdom has been prolific in q.e. prolific. and still that economy is going into recession again as we debate whether or not q.e. actually works. >> although claims weren't too bad this week in the uk. >> i'll give you that part. >> that's all i've got right now. thanks a lot, simon. meanwhile as the treasury auctions 13 billion and bonds we go to chicago for some results. good morning, rick. >> good morning, carl. weird time for an auction, but nonetheless we blew out a month. the ultimate year was 2.896. all right. a smidge below 2906789 now if we look at where d w.i. was trading, it was on the bid side. offered at 2.905. the bid officer to 2.62. this is 2.68. that's better. this one, 38.7 on direct.

15%, this is a 12.4. dealers took a little bit less than 49% of the auction. this is going to be a b plus. the three-year was the best. this was the second best and the dog of the week was yesterday's very, very average ten-year auction. i'm a bit surprised the demand was big. remember, the long end probably isn't going to be the focus. should we have quantitative easing three? carl, back do you. >> only about an hour away from that. thanks a lot, rick. meanwhile bob pisani is back here at post 9. interesting day shaping up. >> we're very flood going into it but a lot's going to change very quickly. the number of new highs at the stock exchange is lower than it's been in the last several weeks. the markets, just because we're inching forward doesn't mean we're necessarily dramatically expanding the whole market here's what i mean. when you get your major groups, techs, materials, financials,

all on either side up or down a quarter of a percent, that's a fairly flat day in the market. it's very hard to make directional calls at this point right now at least up until this moment. there's been a lot of debate. i want to show you a couple of sectors moving here. home building and others have been up. usg, owens corning are to the downside. my understanding is that ivy zeldman cut her numbers on usg corps. that's affecting the entire space herele. as well as the home building stocks. all had been at new highs. these stocks are also being affected by that call here. you see down to about 1%, 2%. this is the big group that's moving today. finally i want to talk about simon's very good comment about the diminishing effects of qe3. potential qe3. this is very hotly discuss oddtown street that each

successive quantitative easing has had less success on the market. dan greenhouse and others, at bgit made some very good points about this. qe1, qe2, operation, very smachlt each program has been smaller than the other. qe1 was 1.f 5. qe2 was 6 billion. that's why when i asked him what would make a real difference, a lot of it was around the concept of a limited program. instead of what would expire in five or six months, yo dow $50 billion a month for example, just picking a number and just leave it open-ended and that's sort of where the vanguard is in terms of what would actually move the market. i think the problem, carl, is simply announcing a $200 billion program or $300 billion program right now is sort of baked into the market. so if you ask the question, what would advance the market, it's

the unlimited program where a lot of people's bets are right now. $50 billion a month. >> infinity and beyond. >> and beyond. >> we'll find out soon. thanks a lot. meanwhile back to the tech titan dominating the headlines this week. of course, that's apple. the new iphone 5 hasn't gone on sale and for some it's already a pain in the neck. thinner, longer, faster and a new connector and it's causing problems. lance unioff. good to see both of you. >> thanks very having us. >> could you hear the collective groan around the country when this news came out yesterday? >> you know, we've known this. they've been talking about taking the traditional 30 pin connector all the way down to this tiny lightning bolt connector and the big -- you know, what is this going to do, all the third party companyies.

apple tried to get in front of that with an adapter. by the way, i like this new adapter because when you do pluck it into the phone, it doesn't care which way you plug it in. turn it one way or the other. reversible. that i actually like. also something else to remember. they saved a lot of space inside the phone by switching to that connector. i don't think they could have gone as light and as thin as they did go if they did not change the technology. time marches on people, you've got to get over it. >> that's true, that's true. although, devin der, i wonder for those who are going to jump in on the new product door you get the kkter, go with the ad t adapter? there's going to be some restrictions. >> it doesn't support every older apple device so certain functions like transmitting music or certain kinds of video won't work. basically you won't have a choice.

that kerkt was ten years old. it's time for an improvement. what's disappointing is they didn't go with the usb connector that a lot of phones are doing. it's sad to see them sticking with thole own standard other than trying to come together with the rest of the cell phone growth. >> although, that's just like them. i didn't realize this. total aftermarket sales of accessories, 36 billion around the world and the iphone's 20% of this market. sometimes i think they do it just to keep those sales going. >> well, you know, mine apple does quite well on its own. they sell millions and millions of these units but they are kind of driving this apple thi third-party economy and flu products will help drive it further. i don't know how much money apple makes through that. you know, it is interesting that apple went its own way and then eventually someone will copy that. but, you know, it's not unusual for them do their own style

stuff. i just think they didn't have a choice. i don't think it will be that big a problem for most consumers who are, you know, oftentimes going to use wireless tools to connect to speakers like, for example, the jaw bone jam box. >> owners of hotels, people who run gyms who have docks for the iphone of today who are going to have to change not just their own but, you know, 50 treadmills in the room or 600 hotel rooms. what do you do? >> it's a major infrastructure problem. these business owners will have to keep the adapters around. that's major cost. for consumers, too, it's a bigger problem because you have things like your car that have the older connector. you're going to have to stick with this adapter. you really have no choice. >> you know, it's not the first time this has happened when they changed the size of the ipod and changed the size of the iphone,

they actually needed the adapter even though they were using the same plug, same port. >> it all depends. >> right. this has happened before. it will actually drive new business. people will build adamtders for i. i think this is not the most important thing about this new iphone 5. >> what is? before i let grow, what is? >> it's lighter and thinner. you know, they packed more technology into it. it looks a lot like the iphone 4s. it's taller. they decided not go with a gigantic screen. it is more comfortable. people love the idea of a longer screen. >> which means a new case obviously. >> more business. >> exactly. finally devin draw, the phone itself, you're reading the same reviews we are. i've seen the word increment tall get used although lance

seems to think there's more to it. >> it's not a very big upgrade to what we're seeing in android phones and nokia's lum ya line but i think apple as company sticks to one design and polish it until it's almost perfect. they've been sticking with the iphone 4 phone for two years now. >> what a story it's been to watch as we look at a five-year chart of apple. guys, thank you so much. we'll see you next time. straight ahead, if you live in california and you shop on amazon, you might want to do some shopping now because in a couple of days you'll be paying sales tax for those purchases. we seal see what it means for the stock price and california's bottom line in just a moment. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan,

in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab...

tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-866-294-5373. one is for a clean, wedomestic energy future that puts us in control. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now. [ male announcer ] the exceedingly nimble, ridiculously agile,

tight turning, fun to drive 2013 smart. ♪ all right. up next on a special edition of half time stocks hanging on to mum tie-year highs. plus pimco gross, and others give instant reaction to the fed announcement. and following the fed, one of the country's best fund managers, fidelitity's will dan off joins us with an exclusive of your best investment ideas. carl, guys on the floor were liking that music coming in. you should have seen them. not to embarrass anybody on floor here. i wouldn't do that. >> thank as lot, scott.

see you in a few minutes. >> meanwhile amazon is going to start collecting sales tax on products sold in california, its largest market and some californians are shopping to beat the deadline including jane wells who's shopping when she's not working. >> the state overall loses $11 billion in sales tax and 10% is thought to come from california because the burden's usually on consumers to report the sales to the state and voluntarily pay the taxes and shockingly they are not doing that. so that changes saturday in california where amazon and large retailers are going to start collecting tacks after long fighting efforts. amazon already collects tacks in six states. that number will double. big deal in california. sales taxes top 9% in some areas. locals are binge shopping. this couple is building a home

in bakersfield. the home's not going to be done for months but they're rushing to quickly pick appliances and fixtures now. >> i rushed to figure out what i like, didn't like, you know, to put a list together. >> we will spend roughly between 11 and $12,000 on amazon this week. >> this would probably cost me about 1,700 bucks on here. free shipping, no taxes. so i'm saving. >> and in fresno, she's stocking up on stuff she doesn't really need right now. peanut butter, boots, avoiding the sales tax mostly on princip principprinc princip principle. >> it's more fun. i have a $360 ticket i have to pay off, so that's my contribution. >> if amazon sales in california, quote, we have seen an 8 to 10% acceleration which could be due to the upcoming tax

deadline. california is such a huge player for amazon. after that erin kessler says it may have a modest impact on amazon's big ticket items. >> if positive results come from more sales taxes in california, think you will see other states follow suit. >> even yours truly is buying up dog food for the rest of the year and a few christmas gifts on company time. sorry. will i notify the state and pay taxes? taking the fifth. later on power lunch, what's up for ebay and overstock. >> that's a good story. jane wells in los angeles. when we come back, why new balance is fighting to keep operations on american soil. the company's ceo and president joins us live after this break.

up. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.

earlier this morning faber and cramer interviewed drexler. >> there are too many retailers, too many brands, too many designers, too many discount stores, and the predator, online companies are selling discount like crazy. >> and in retail as in many industries, the product's end price is determined by the cost to make it.

the bulk of it is done overseas. new balance is still in america. there was a tour of new balance's company in maine. there's a trade policy change that may threaten the company keys ability to do so. robert demartini is the president and ceo and he joins us live. always good to talk to you. welcome. >> carl, good to see you. >> walk me through some of this policy change. it's essentially removing the tariff on foreign footwear, is that right? >> that's right. the trans-pacific trade deal is a deal currently being worked on and inside that deal is the powe extend chal removal of tariff that protects the 7 million pair of shoes we make in the u.s. >> what's at risk? how many layoffs would we be talking about? how many factories would you close? >> new balance has five

factories in the u.s. vietnam which already imports a significant amount of shoes in the country would have an advantage up against those factories and it would be very difficult to keep them competitive. >> what's the ambassador's take on this so far, as far as you can tell? >> i think the in fact he's here is a great sign. he understands that we've got real jobs here supporting the community. vietnam is a government-subsidized industry in shoe making and all we're asking for is a fair level playing field to compete on. >> some might argue -- someone coming new to the story may say, well, the tariff looks like it keeps things uneven. believe the tariff, let free markets work, but you think the offshore company that that company is getting is the main problem? >> it is the main problem. in this factory i'm standing in how, ten years ago it took 14 days to make a pair of shoes. today it takes two hours. we can compete with anybody we have to make sure there's gover

we have to figure that into the equation. >> walk tme through the last fie years. there must be a benefit to moving things overseas. why is it important to keep it here? i imagine transportation and things like that must come into play. >> there's no question. transportation is one of the benefit bus the biggest thing is we're closer to the u.s. consumer. the response time out of the factory i'm standing in today, we can refill a consumer in a matter of days instead of weeks and months with product on the water. >> how much support, i imagine, you're getting a lot of it from local and state politicians, but i mean reading the -- reading the wind here, the political winds, how do you see this tariff either going away or not? what's going to happen? >> well, the ambassador today told all my employees he's after smart bills that protect and open up markets and think as

long as he uses that as the guiding principle, we'll be in okay shape. >> i'm thinking back to ralph lauren and some of the controversies they faced during the olympics regarding usa teamwear that was not made in the states. mine don't you think that the collective thinking around this top sthak it's going to be favorable to your point of view, at least in the short to medium term? >> well, i think emotionally the consumer in the u.s. wants some goods made in the u.s. and it's not for everybody you've got to want the products we make and you have to be competitive. we're seeing with what went on during the olympics that there's a demand for american made and there's demand in other countries for american made and we're now exporting a third of what we make to other markets. >> i was going ask you a general "how's business" kind of question. we got a downgrade of nike because citigroup thinks futures growth is going to come under 10% as a lack of one-time

sporting events. even if gross margins get a little bit better here, they have a hard time adjusting their price target of 101. that's a competitor, but how are you doing? >> i can't make any comments about nike but our business is growing by 15%. that's driven by progress on our home market and also progress abroad. >> robert, good to have you. keep us posted on what happens. good to see you. >> thank you. >> robert demartini of new balance from maine. we geet some final thoughts after our break. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time.

which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.

wouldn't it be nice if there was an easier, less-expensive option than using a traditional lawyer? well, legalzoom came up with a better way. we took the best of the old and combined it with modern technology. together you get quality services on your terms, with total customer support. legalzoom documents have been accepted in all 50 states, and they're backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. it's law that just makes sense.

"squawk" on the street on a thursday. most of the rumors about iphone are true. the question today is what's the best way for apple to keep its secrets moving forward. andre writing build a factory on the moon which apple has almost enough money to do. mr. market guru writes use a win server and another writes use romney's tax returns. a new record high. 5224 was the